Notebook > Money

Generic solution?

Money | Many people do not know they could personally save $10 or more on each prescription co-payment if they bought generics

Issue: "Samuel Alito," Nov. 12, 2005

Some of the trends driving up health care costs-such as longer life spans and better technology-are beyond the control of individuals, and only a moral monster would want to stop them, anyway.

Other costly trends could be fought and significantly weakened. One such trend is the high price of prescription drugs. According to an Oct. 25 report from Express Scripts Inc., a pharmacy benefit plan manager, U.S. health care consumers could have saved themselves, their employers, and insurers $20 billion last year if they had asked their doctors about generic versions of popular drugs. Express Scripts estimates that $24 billion will be lost the same way this year.

Many people do not know about generic alternatives to popular drugs, but they could personally save $10 or more on each prescription co-payment if they bought generics instead of branded drugs. They could also save money for employers who struggle to keep workers insured as health care costs escalate far above the rate of inflation each year.

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A switch to generics would be an easy reform, said Steve Miller, vice president for research at Express Scripts, because "using more generics simply requires better education and awareness of alternatives, not a big-dollar, up-front investment."

He estimates that generics could make up 95 percent of the gastrointestinal drugs dispensed in the United States, but currently only make up 31 percent. The total amount lost: $5.4 billion. He figures the use of generics would save $5.1 billion nationally for anti-cholesterol drugs, $3.9 billion for NSAIDs, $3.2 billion for anti-depressants, $2 billion for anti-hypertensives, and about $500 million for calcium channel blockers.

Dr. Miller's research does have its detractors. "Much of the increase in generic drug use advocated by Express Scripts involves switching patients to medicines different from those prescribed by their physicians," said Ken Johnson, senior vice president of the Pharmaceutical Research and Manufacturers of America. "They are not generic copies of the prescribed treatments."

But the issue of generic use is only going to grow in coming years, as more and more branded drugs lose patent protections. At least 15 new generic drugs likely will be available next year, including an alternative to the popular cholesterol reducer Zocor. Murray Aitken, senior vice president of IMS Health, told the Bloomberg news service that 2006 would be "a pretty pivotal year for the [drug] industry, the biggest year ever in terms of drugs likely to lose their patents in key markets."

Generics also may ease in a small way the country's impending entitlements crisis. As President Bush's prescription drug benefit for Medicare comes into force next year, and as the program continues to careen toward insolvency, generic drugs could help ease the growing burden on taxpayers.

"We have only scratched the surface in taking advantage of the money-saving potential of clinically sound generic drugs," Dr. Miller said. "As additional generics come to market and the use of prescription drugs grows, the opportunity to lower health care costs becomes even more significant."

But only if patients ask about them.

Timothy Lamer
Timothy Lamer

Tim is managing editor of WORLD magazine.

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